Original scientific paper
https://doi.org/10.1080/1331677X.2021.1875860
Economic growth under Solow-neutrality
Merter Mert
orcid.org/0000-0001-5359-1041
Abstract
This study is the first attempt to measure growth depending on
the equation of the concave production possibility frontier, under
Solow-neutrality. Although there is evidence that the nature of
technological progress is Solow-neutral, Solow-neutrality is not
compatible with the steady-state. This study solves that contradiction. To do this, we make three simple contributions. First, the
natural rate of growth has been explained in harmony with the
economic concepts such as constant returns to scale, full capacity
and steady-state, under Solow-neutrality. Secondly, the equation
of the concave production possibility frontier has been obtained
when the nature of technological progress is Solow-neutral.
Thirdly, economic growth has been explained based on the equation of the concave production possibility frontier, under Solowneutrality. According to the first result of the study, Solow-neutrality becomes compatible with the long-run equilibrium growth
and the steady-state under specific conditions. According to the
second result of the study, positive economic growth occurs
under specific conditions.
Keywords
economic growth; production possibility frontier; returns to scale; Solow-neutrality; concavity; natural rate of growth
Hrčak ID:
301666
URI
Publication date:
31.12.2021.
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